Set a budget before applying for auto loan

Buying a new car requires careful financial planning and it begins with setting a budget. Once you’ve put a finger on the type of car you wish to own – hatchback, sedan, crossover, SUV – decide the maximum amount you are willing to spend on the car. Stick to the budget as far as possible – it’s easy to get carried away by some savvy salesperson, who tries to talk you into buying a model or a higher variant that you either do not need or cannot afford. This is all the more important if you’re buying a car on loan, in which case you’ll have EMIs to pay. Take a long hard look at your income and see if you can make timely repayments after meeting your other monthly expenses. If the car you want to buy does not fit in your budget, consider a second-hand car. There are some really good second-hand cars in the market and our Used Car Buying Guide will help you find how to snag the best deals.

If you’re thinking buying a new car is a one-time investment, it’s not. If fact, it’s not an investment at all. Car prices depreciate every year so do take that into account. Factor in all the overheads and after-purchase costs involved – from the cost of running the car (monthly fuel bills, annual insurance bills) to the expenses you’ll incur in maintaining and servicing the car.